Germany’s ‘mixed bag’ energy law reforms pass final parliamentary hurdle

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Controversial reforms to German energy law have passed another parliamentary hurdle, having been approved by the country’s upper house, the Bundesrat (federal council) and now stand to become law on 1 August.

The reforms, which include the levying of charges on self-consumption solar systems while exempting some heavy industry from the same charges, were passed through the Bundesrat on Friday, having already gained approval in the lower house (Bundestag) on 27 June.

Owners of PV systems over 10kW will have to pay up to 30% of the EEG levy by the end of 2015, rising to 35% by the end of 2016, eventually to be capped at 40% in 2017. The charges are meant as compensation for grid charges and other costs incurred by balancing the addition of renewable energy sources onto the country’s electricity network.

However, the reforms represent something of a compromise from their originally proposed shape. German solar energy industry group BSW Solar, which along with other advocates had roundly and frequently condemned the changes to Germany’s Energiewende (‘energy transition’) movement away from nuclear and fossil fuels, said that Friday’s approved decision represents a “mixed bag”.

In November last year, BSW Solar said the reforms “turn the ‘polluter pays’ principle on its head and set back the competitiveness of the photovoltaic industry by years”. David Wedepohl of BSW Solar confirmed to PV Tech that the changes are now set to become law on 1 August.

Wedepohl went on to explain that while still condemning the levying of self-consumption charges, BSW Solar welcomed the fact that the degression of feed-in tariff rates has been slowed down by “about half” on a monthly basis with exemptions on surcharges for sub-10kW systems used for self-consumption. Additionally, feed-in tariffs for new solar power facilities with capacity of between 10kW and 1,000kW, generally applicable to mid-size installations such as commercial rooftops, are set to rise by 0.3 cents per kW, which Wedepohl also appeared to welcome.

Wedepohl said the bill “…is a mixed bag for the degression of the FiT is actually slowing down (by about half) on a monthly basis, small systems under 10kWp are exempt and the tariff will actually be raised for all systems above 10kWp by about €0.3 per kWh. Needless to say, a 'sun tax' which slaps a surcharge on directly consumed solar electricity by volume (if you make more CO2 neutral electricity you pay more) remains counterproductive.”

Wedepohl added that, “How the market will develop will depend largely on the development of system prices and new business models”. BSW Solar has recently produced a report for prospective investors on emerging business models for the international PV industry.

The German Renewable Energy Federation BEE (Bundesverband Erneuerbare Energie) also responded to a request for comment from PV Tech this morning. Jens Tartler, a spokesman for the group said BEE was “very disappointed” with the passing of the reforms.

While conceding that the law in its latest form represents something of a compromise from what was originally proposed, Tartler said David Wedepohl and BSW Solar might have been expressing relief that the reforms showed some compromise from their originally proposed forms, but that this relief was “very relative.”

According to Tartler and BEE, under the new ‘corridor’ system of encouraging installed capacity, growth of renewable energy could be halved, even compared to the work of previous conservative governments.

“We all think growth for the solar industry will be cut down brutally,” Tartler said.

Tartler said that BEE and Germany’s Green Party had both originally been optimistic at the appointment of the head of the centre-left SPD, Sigmar Gabriel, as the country’s new energy and economy minister. According to Tartler, Gabriel had two sides to placate politically, the voters who backed his party versus coal and other heavy industry, which traditionally formed the working class backbone of his party’s support.

“The Green Party is disappointed and so are we (BEE),” said Tartler. He said the impression the two groups now had of Sigmar Gabriel was that the politician was now “100% coal-wing”, influenced for the most part by the interests of the heavy industries that sought exemption from the EEG surcharges.

In addition, Tartler said that despite the compromise on the speed of lowering FiTs that had been made, tariffs were still falling too fast for cost reductions to keep pace. He said self-consumption PV had been a “last hope” for German solar industry to keep deploying new generation capacity and that even this is now seriously jeopardised.

Speaking of mooted plans to launch a tender system for large-scale solar, a market segment which Tartler described as “almost dead”, Tartler said while studies BEE had seen from the UK, Netherlands, Brazil and France showed tenders were not particularly successful, a switch to tenders could be “better than nothing” in terms of getting new facilities built.

This story was updated from its original to include commentary from BEE.

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